One week later – Some Trump trades gain momentum and some are fading

November 12

It’s a good time to check in on how the “Trump trade” is doing. The stock market rallied to fresh records after Donald Trump was declared the next U.S. president, with investors betting that his vow to cut taxes and loosen regulation will foster deal-making, stimulate the economy and support risk assets. The S & P 500 last week scored its best week since November 2023, hitting the 6,000 mark, while the 30-stock Dow Jones Industrial Average climbed above 44,000. But the postelection euphoria is already starting to fade in some of the early winners. Stocks seen as early beneficiaries, among them steelmakers and banks, are losing momentum, while others like Tesla are continuing to climb. Take a look at the names CNBC Pro found that are starting to lose their postelection mojo: Each of the “Trump trades” was up at least 5% the day after the election this year, and also climbed 10% from Election Day to year-end in 2016, the first time Trump was elected, according to FactSet. But since last Wednesday, each is down at least 2% — reflecting waning enthusiasm in the stocks that helped spur the postelection rally. Construction equipment maker Caterpillar has seen run-up begin to fade. Its shares are nearly flat week so far this week. Steelmakers Steel Dynamics and Nucor are also declining, losing more than 3% each on Tuesday alone. Some financials such as JPMorgan , regional bank Citizens Financial and insurer Prudential are also seeing a slowdown after their initial rally (financials were the top-performing sector on Nov. 6, the day after the election). Morgan Stanley analyst Betsy Graseck recently said that a Trump presidency and Republican-controlled Senate could drive up big banks , such as Wells Fargo and Bank of America . Semiconductor manufacturer Micron Technology and cloud networking company Arista Networks , along with a couple other tech names, are others that are seeing slowing momentum. Others thought to benefit are continuing to surge. These stocks were also up 5% the day after the election, had gained 10% from Election Day to year-end the first time around in 2016, but are moving higher and up at least 1% since the initial postelection reaction last week. Take a look at the lot: Tesla ‘s the most popular winner in the group, gaining roughly 21% since Nov. 6, boosted by CEO Elon Musk ‘s close relationship with Trump. Tesla is now up more than 36% for the year, a turnaround after facing several struggles with its electric vehicles and standing as one of the most oversold names on Wall Street to start the year. Deutsche Bank analyst Edison Yu said Tuesday that if Vice President-elect JD Vance were to “take the reins” after Trump, Musk could have an even closer ally in the presidency for up to 12 years, benefiting Tesla’s efforts in automobiles, robotaxis and potentially humanoid robotics. Other than Tesla, energy stocks Coterra Energy and Baker Hughes are also moving higher, the latter gaining more than 15% just this month. And while some regional lenders are declining postelection, many of the biggest banks on Wall Street — including Bank of America , Morgan Stanley , Goldman and Citigroup — continue to reap the Trump trade momentum.

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